Tuesday February 05, 2008

The net inflow of migrants dried up in December, providing no support for a sagging housing market and no relief for employers grappling with a scarcity of workers.

There was a net loss of 106 "permanent and long-term" migrants, who are those arriving with the stated intention of staying for at least a year or leaving for at least a year. Adjusted for seasonal variations there was a net gain of just 20.
It left the final tally for 2007 a gain of 5500. That is little more than half its average level over the past 10 years.

It meant that, on a net basis, the country lost five New Zealanders for every six non-New Zealanders it gained. Two out of three New Zealand emigrants headed for Australia.

Net migration has been falling since the start of last year and is at its lowest level since late 2001.

A Statistics New Zealand report on demographic trends published last month does not show large differences in the age between people leaving and those arriving.

For example, in the year to June 2007, 52 per cent of immigrants were aged in their 20s or 30s, while 53 per cent of emigrants were in that age group. While there was a net loss of 1700 people in their early 20s, 60 per cent of the net inflow of migrants were aged between 25 and 40.

In terms of the impact on the labour force the net gain in population is offset by a higher proportion of immigrants (45 per cent) than emigrants (37 per cent) being classified as not in the workforce on the grounds of their age or because they are students.

The loss of 250 tradespeople followed five years of gains and is small as against the loss of 1300 to 1700 a year between 1998 and 2001.

ASB chief economist Nick Tuffley said with net immigration slipping below its long-run average it was providing little impetus to the housing market or consumer spending.

"It is not too far away from what the Reserve Bank was expecting so in terms of housing market demand they will see it as business as usual."

The flipside was not much relief for firms looking for workers. "We have for some time seen relatively subdued labour force growth. So you are not getting that relief valve that was there when migration was really strong."

(New Zealand Herald, Brian Fallow)